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INVESTING TO CAPTURE GROWTH OPPORTUNITIES IN CONSUMER PACKAGING Capital Markets Day 2015 – Business Area Consumer Board2015-11-12 Ulf Eliasson, SVP Business Area Consumer Board
58
CONSUMER BOARD HAS AN EXCELLENT POSITION FOR GLOBAL GROWTH
Global leader in
ambient liquid packaging board
Excellent position in
premium cartonboard segments
59
Pre
miu
mC
om
mo
dity
INVESTING TO INCREASE VOLUME GROWTH
Value growth
2-4% CAGR
60
Volume growth
4-5%CAGR
Attractive market opportunities
Innovations together with customers and brand owners
Investments for growth
CONSUMER BOARD IN BRIEF
% of Group
Rolling 12 months September 2015
NET SALES
MSEK
7 841
EBIT
MSEK
1 020
SALES VOLUME
kTON
1 043
Food & beverages, 90%
Consumer & Luxury goods, 9%
Medical & Hygiene, 1%
SALES PER REGION
• Europe 67%
• Asia 24%
• Middle East 5%
• Africa 2%
• South America 1%
• Other 1%
61
36%
37%
39%
Food & Beverages, 90%
Consumer & Luxury goods, 9%
Medical & Hygiene, 1%
SALES BY MARKET SEGMENT
0
2 000
4 000
6 000
8 000
10 000
2013 2014 R12M Sep2015
Millio
n S
EK
0
200
400
600
800
1 000
1 200
2013 2014 R12M Sep2015
Th
ou
san
ds t
on
nes
DELIVERING ON OUR VOLUME GROWTH STRATEGY
+5% +4%+7% +5%
62
18%21% 22%
0%
5%
10%
15%
20%
25%
2013 2014 R12M Sep2015
Sales volume Net sales
EBITDA margin
GLOBAL MEGATRENDS DRIVE DEMAND FOR VIRGIN FIBRE CONSUMER BOARD
Global economy
Economic growth especially
in emerging markets
Share of middle class is
expanding
63
Life style
Change in consumer
behavior
Demographic
High urbanization rates
especially in Asia
Sustainability
Increased environmental
awareness
Increased focus on product
safety
GROWING GLOBAL TREND FOR BEVERAGES PACKED IN CARTONS
64
Other beverages
4-4.5% CAGR
Juice
3-3.5% CAGR
Dairy products
3-3.5% CAGR
Source: CAGR% 2015-2025, BillerudKorsnäs analysis on Zenith International 2015 and Pöyry data 2015
Africa
Middle East
Central Asia
Source: CAGR% 2015-2025, BillerudKorsnäs analysis on Zenith International 2015 and Pöyry data 2015
GLOBAL DEMAND GROWTH FOR LIQUID PACKAGING BOARD SUPPORTS OUR INVESTMENTS
65
EuropeNorth America
Central & South
America
6.5-7%
6.5-7%
South & South East Asia
China1-1.5%
3-3.5%
0.5-1%
3-3.5%
Global supply gap
>1 MTON2014-2025
Source: BillerudKorsnäs analysis on Vision Hunter 2015
WE TARGET PREMIUM SEGMENTS IN VIRGIN FIBRE CARTONBOARD
66
0%
2%
4%
6%
8%
10%
China
Rest of Asia and Oceania
Rest of the world
Latin AmericaUS
Europe
Market size and growth per region
Dry food
Frozen food
Pharma
Cosmetics
Graphical
Tobacco
Multipack beverages
Confectionery
Luxury drinks
Market size and growth per end use
CA
GR
% 2
015
-20
20
WE ARE INVESTING FOR FUTURE CAPACITY INCREASESSEK 1.6 BILLION INVESTED IN BOARD MACHINES AT
GÄVLE & FRÖVI DURING 2012-2017
67
GÄVLE+45 000 ton/year to 670 000 ton/year
MSEK 490 investments in 2012-2014
FRÖVI+155 000 ton/year to 550 000 ton/year
MSEK 1 150 investments in 2013-2017
20%in annual board production capacity
(2018 vs 2013)
350
400
450
500
550
600
650
700
2013 2015 2016 2017 2018
Th
ou
san
d t
on
nes
GÄVLE
FRÖVI
WE HAVE A STRONG ASSET BASE TO CAPTURE GROWTH IN CONSUMER PACKAGING
68
1 BillerudKorsnäs, PM5 Frövi 480
2 Competitor, PMA 450
3 Competitor, PMB 445
4 Competitor, PMC 435
5 BillerudKorsnäs, PM5 Gävle 365
6 Competitor, PMD 355
7 Competitor, PME 320
8 Competitor, PMF 315
9 Competitor, PMG 310
10 BillerudKorsnäs, PM4 Gävle 305
Source: BillerudKorsnäs analysis on Pöyry and Vision Hunter 2015
* Integrated to chemical pulp
Asset quality and capacity, virgin fibre cartonboard
Average technical age, years
Ave
rag
e c
apa
city, kto
nn
es/y
ear
0
100
200
300
400
500
600
05101520253035
US
Europe
China
Frövi, KM 5
Liquid Packaging Board capacity
thousands tonnes per year*
NEW CAPACITY IN GRUVÖN FOR CONTINUING GROWTH
69
Targeting long-term growth for liquid packaging board and premium
cartonboard segments
Cost-efficient board machine with state-of-the-art technology
designed for premium products
Good asset quality in pulp mill for cost-efficient pulp production
Long production experience in Gruvön of consumer board products
INNOVATIONS IS KEY TO STAYING COMPETITIVE
Advanced
production
technologies New
emerging
technologies
Sustainable
material solutions
70
JACQUART CHAMPAGNE – A PERFECT FIT FOR BILLERUDKORSNÄS
71
The relations
The know-how
The products
The reliability
INVESTING TO INCREASE VOLUME GROWTH
Value growth
2-4% CAGR
Attractive market opportunitiesBe the global leader in ambient liquid packaging board
Develop an excellent position in premium cartonboard segments
Investments for growthInvest in existing infrastructure for increased capacity
Pre-feasibility study for new board machine for additional capacity
Innovations together with customers and brand owners
Focused resources for long-term innovations
Continuous innovations to add value to customers and brand owners 72
Volume growth
4-5%CAGR
Q&A
73
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